A number of studies have revealed that risk owing to low level of health security is endemic for informal sector workers. The vulnerability of the poor informal worker increases when they have to pay fully for their medical care with no subsidy or support. On the one hand, such a worker does not have the financial resources to bear the cost of medical treatment, on the other, the health infrastructure leaves a lot to be desired. Large number of people, especially those below poverty line, borrows money or sells assets to pay for the treatment in private hospitals. Thus, Health Insurance could be a way of overcoming financial handicaps, improving access to quality medical care and providing financial protection against high medical expenses. To address such issues, the Union Government has launched a Health Insurance Scheme, the Rashtriya Swasthya Bima Yojana (RSBY), for BPL workers as defined by the Planning Commission and their families, in the unorganized sector. The annual insurance cover is for a maximum amount of Rs.30,000 for a family of five, including the worker, spouse, children and dependent parents (if included in the BPL family list), and the annual insurance premium not exceeding Rs.750 is to be decided through tender process. Under the scheme, the Union government will meet 75 percent of the premium (not exceeding Rs.565), and also the cost of a Smart Card for each family, estimated at Rs.60 per card. The beneficiaries have to pay an annual registration charge of Rs.30 per family (which is part of the insurance premium to be paid to the insurance provider), and the State Government is to pay the rest of the premium, together with the administrative cost. The scheme as originally envisaged was to cover the entire country in stages by the end of 2012-13. But now Government of India has agreed to give sanction for implementation of the scheme in all the 14 districts of Kerala during 2008-’09 itself.

In addition to RSBY the State Government have decided to provide similar benefits to such other poor families as are not covered under RSBY and to those who opt to subscribe to the scheme by paying such amount as may be prescribed. In the Budget Speech for 2008-2009, the Hon'ble Minister for Finance has announced implementation of a more ambitious health insurance scheme in the State namely Comprehensive Health Insurance Scheme (CHIS). The special feature of CHIS is that it extends to all the families other than the BPL families (Absolute Poor) as per the Planning Commission's guidelines who come under the RSBY. The non-RSBY population will be divided into two categories: (a) those belonging to the BPL (Poor) list of the State Government but not to the list as defined by the Planning Commission and (b) the APL families that belong neither to the State government list nor to the list prepared as per guidelines of the Planning Commission. In the case of families of the first category (a), the beneficiaries will have to pay Rs.30 per annum per family as beneficiary contribution, and the State Government will meet all the remaining expense including for the “smart card”. In the case of families of the second category (b), the beneficiary contribution will cover the entire amount of the premium including the cost of the “smart card”. In other words, the beneficiary contribution will be Rs.30 per family per annum for RSBY families and for families belonging to category (a) and the entire amount for families belonging to category (b). Accordingly, Government of Kerala has decided to launch these schemes in 14 district of the State.

Beneficiary Family:
Coverage under the scheme would be provided for BPL (Absolute Poor), other Poor workers and their families [up to a unit of five) and such other families who subscribe to the Scheme. This would comprise the Household Head, spouse, and up to three dependents. The dependents would include such children and/or parents of the head of the family as are listed as part of the family in the database provided by State Government. If the parents are listed as a separate family in the database, they shall be eligible for a separate card. Issue of smart card would be the proof of the eligibility for the purpose of the scheme.

Benefits:

a.) The scheme shall provide coverage for meeting expenses of hospitalization for medical and/or surgical procedures of beneficiary members up to Rs.30,000 per family per year subject to limits, in any of the network hospitals. The benefit on family will be on floater basis, i.e., the total reimbursement of Rs.30,000 can be availed of individually or collectively by members of the family per year.

b.) Pre-existing conditions/diseases to be covered, subject to minimal exclusions.

c.) Coverage of health services relating to surgical nature can also be provided on a daycare basis.

An indicative list of daycare treatment

d.) Provision for transport allowance (actual with limit of Rs. 100 per visit) subject to an annual ceiling of Rs. 1000 shall be a part of the package.

e.) Pre and post hospitalization up to 1 day prior to hospitalization and up to 5 days from the date of discharge from the hospital shall be part of the package rates.